Ken Griffin, Citadel on CNBC’s Delivering Alpha, September 28, 2022.
Scott Mill | CNBC
Ken Griffin, founder and CEO of Citadel, believes that the Federal Reserve should slowly take interest rate cuts to deal with stubborn inflation.
“If I were them, I wouldn’t want to cut production too quickly,” Griffin said Tuesday at the International Futures Industry Conference in Boca Raton, Florida. “The worst thing they could end up doing is cut, pause, and then quickly move to higher rates. In my opinion, that would be the most damaging course of action they could take.”
“So I think they’re going to cut rates a little slower than people expected two months ago. I think we’re seeing that happen,” he added.
His comments came as data showed inflation rose again in February, with the consumer price index slightly above expectations on an annual basis. Rising price pressures may keep the Fed from cutting interest rates until at least the summer.
The billionaire investor said there are huge inflationary forces causing prices to rise.
“We still have a lot of government spending. That’s good for inflation. And we’re also going into a period of deglobalization in history. So we have two huge drivers that continue to support the inflation narrative,” Griffin said.
Although inflation is well below its peak in mid-2022, it is still well above the Fed’s 2% target. Fed officials have signaled in recent weeks that they may cut interest rates at some point this year and warned against prematurely relaxing the fight against high prices.
The Fed’s next two-day policy meeting will be held in a week.
Citadel’s flagship multi-strategy Wellington fund gained 15.3% last year.
